Covering Tim Geithner: A Lagging or Leading Indicator?

Speaking of Geithner, the Times has a massive front-page story today focussing on his work at the New York Fed, and his close ties to what the Times terms “the finance club.” Yves Smith at Naked Capitalism wonders whether the publication of the piece—which, while reasonably balanced, was certainly negative—means that the “knives are coming out for Geithner,” and argues that since “one has to assume a story of this sort is a lagging indicator” of people’s sentiments, that means Geithner is now seen to be sufficiently at risk to be fair game.

If I can be naive for a moment, I’ll just suggest that the biggest reason the Times published this story is because it thought it was newsworthy, and offered an angle onto Geithner’s career that has been relatively undercovered. But even if you accept Yves’s premise that the Times’ decision to cover a story like this tells us something important about the political standing of its subject, I think it’s a mistake to think this story is a sign that “Geithner may be starting to be perceived as a liability.” After all, a piece this big presumably took many weeks to report and write, which means that it was probably assigned a while ago, perhaps not long after Geithner came into office. Back then (in the wake of the tax kerfuffle, and the weak speech rolling out the bank plan), Geithner’s standing did look shaky, which, according to Yves’s logic, might have made the Times more willing to do a major piece attacking him. But what was true when the piece was assigned isn’t necessarily true today. In that sense, the story might be a true lagging indicator—while it may implicitly be a sign that in the early weeks of the Administration Geithner was, in fact, perceived to be a potential liability, it doesn’t really tell us much about how people are feeling about Geithner today.

James Surowiecki is the author of “The Wisdom of Crowds” and writes about economics, business, and finance for the magazine.